Remuneration and shareholdings of the President & CEO and the Neste Executive Board
The Board of Directors is responsible for deciding the terms of employment and remuneration of the Company’s President & CEO, together with the remuneration principles observed in respect of senior management. The Personnel and Remuneration Committee is responsible for making proposals in this area and for monitoring and evaluating the performance of the President & CEO and top managers.
President & CEO
The salary and fringe benefits paid to the President & CEO in 2011 totaled EUR 53,750 a month. In addition to these payments, the President & CEO can receive an annual performance-related bonus, which may not exceed 40% of his or her annual salary and fringe benefits. The criteria for this bonus (short-term incentive) are based on the President & CEO’s success in achieving his or her personal targets and on the Company’s financial performance and success in achieving its corporate targets. The President & CEO also comes within the scope of a long-term incentive plan approved in 2009. The maximum sum payable as part of this program may not exceed participants’ annual gross salary paid during any earning year covered by the program.
The Company may terminate the President & CEO’s employment by giving a six-month period of notice, and the President & CEO may resign with the same period of notice. Should the Company decide to give notice of termination, the President & CEO shall be entitled to his or her salary during the six-month period of notice, together with a severance payment equivalent to 18 months’ salary.
The retirement age of the President & CEO is 60 years, and his or her pension is based on a defined benefit plan. The pension paid is 60% of his or her retirement salary, equivalent to a monthly salary calculated on the basis of statutory pension insurance contributions made over the previous 10 years. The pension is insured by an insurance company, and insurance contributions paid during 2011 totaled EUR 368,582.
Other agreements and pension arrangements for senior management
Neste Executive Board members are paid basic salary and they are entitled to fringe benefits. In addition, they can receive annual performance-based remuneration equivalent to a maximum 40% of their annual salary including fringe benefits. They have concluded director agreements that specify a typical termination period of six months and possible six-months of severance pay.
The members of the Neste Executive Board come within the scope of the Finnish national pension and supplementary pension system. Pensionable age is either 60 or 62. Under the terms of the oldest defined benefit plans, pensions can be a maximum of 60% of a person’s pensionable salary. Pensions are calculated on the basis of the average annual monthly salary paid in accordance with the Finnish national pension system during the 10 years preceding retirement. Newer supplementary pension arrangements specify a retirement age of 62 for everyone and they take the form of defined contribution plans. Pension insurance payments in 2011 totaled EUR 311,685. Future director agreements will specify a retirement age of 63. Both defined benefit and contribution plans are insured by a pension company.
|Remuneration paid to the President & CEO and NEB members, EUR|
|President and CEO||669,706.60||189,946.00||859,652.60||651,446.73|
|Other NEB members||1,578,828.08||451,079.30||2,029,907.38||1,734,765.65|
|Shareholdings of the Neste Executive Board as of 31 December 2011|
|Shareholdings as of 31 December|
|Matti Lievonen||1958||President & CEO||2008||17,000||15,000||+2,000|
|Matti Lehmus||1974||EVP, Oil Products and Renewables||2009||6,010||6,010||-|
|Sakari Toivola||1953||EVP, Oil Retail||2007||1,000||500||+ 500|
|Simo Honkanen||1958||SVP, Sustainability & HSSE||2009||3,222||2,222||+1,000|
|Hannele Jakosuo-Jansson||1966||SVP, Human Resources||2006||3,779||3,779||-|
|Osmo Kammonen||1959||SVP, Communications, Marketing & Public Affairs||2004||9,022||9,022||-|
|Lars Peter Lindfors||1964||SVP, Technology & Strategy||2009||3,450||1,450||+2,000|
|Ilkka Poranen||1960||SVP, Production & Logistics||2009||5,942||5,942||-|
|Ilkka Salonen||1965||Chief Financial Officer||2009||7,500||-||+7,500|
|Information on shareholdings cover Neste Oil shares directly, through organizations in which those concerned have a controlling interest, and in their capacity as trustees.
Neste Oil did not pay any share incentives to the President & CEO and Members of the Neste Executive Board in 2011.